BTL purchases responsible for nearly half of stamp duty income

Stamp duty land tax figures show a massive reliance on buy to let purchases reports the LettingAgentToday website, with 43% of all stamp duty coming from buy to let investors and holiday home purchasers.

Citing data from investment consultancy London Central Portfolio (LCP), it shows that almost half of BTL stamp duty income is accounted for by the 3% stamp duty surcharge on additional homes introduced two years ago.

The study also shows that:

overall, residential stamp duty receipts in 2017 reached a record £9.5 billion in total – up £1.3 billion from 2016;

the most expensive 10% of properties contributed around 60% of all stamp duty receipts;

Greater London contributed over a quarter (39%) to the total revenue;

UK residential transactions are fairly static, increasing by just 1.1% from 2016-2017, suggesting that the stamp duty surcharge was the main driver for increased revenue.

A spokesperson from LCP said that the government needs to be careful with further policies targeting landlords, adding: “Contributing a huge amount towards the Exchequer’s tax take, landlords have been under increased public and government pressure over the last five years. New lettings listings are now down 5% to February, according to a recent Knight Frank report.

“Reliance on the Stamp Duty take from second properties, which pay an additional rate of 3%, to prop up the market is, therefore, a dangerous gamble. Representing almost half of all tax take, any new deterrent could start eating away at the public purse.

“Unless the Government can start to stimulate property transactions again, which according to Land Registry have fallen 29% in England and Wales over the last decade, the outlook for future Stamp Duty revenues looks fairly grim”.